John Spahi and his son Omar are expanding their real estate holdings in New York

The Spahi family, which left Egypt nearly penniless in the 1960s after the Nasser government seized their textile business, built a second fortune in the U.S. partly through their real estate investments.

At least one family member, however, has some regrets about their New York City deals.
John Spahi,
62 years old, bought two mixed-use buildings in Manhattan’s Washington Heights section in the mid-1980s for a total of $1.8 million. He sold them in the late 1980s and plowed $2.5 million of the profits into an upscale hosiery store.

That profit doesn’t look so great in retrospect. “Today I could get a 5,000-percent profit,” Mr. Spahi said.

Now, Mr. Spahi’s 27-year-old son, Omar, is re-establishing a New York foothold for the family. Earlier this year, he spent a total of $5.4 million to purchase three residential condominiums at 100 Avenue A, a new 32-unit luxury building in the East Village. He plans to market them as rentals.

The family recognizes it would have made much more on its earlier New York investments if it had waited out a few years in the early ’90s when the New York real estate industry fell and then quickly recovered,
Omar Spahi
said. The family doesn’t “want to make [the] same mistakes.”

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The Spahis’ story shows the importance that real estate plays in the U.S. success of many immigrant families. But it also underscores the challenges. Like many of New York’s larger dynasties, the Spahis have seen their ups and downs.

For example, Omar Spahi had to seek personal bankruptcy protection in the recent downturn. And the hosiery store John Spahi opened closed after only two years in 1990, a victim of recessionary pressures.

“It’s the American story of rags to riches back to rags and back to riches,” said John Spahi. “It is what makes life interesting.”

John Spahi came from a wealthy Egyptian family that made a fortune in the textile industry. After leaving Egypt, he lived in numerous countries. When he went to live in California in 1975, he had $100 in his pocket, he said.

The elder Spahi initially worked in a flea market and imported jeans. In 1983, he moved to Manhattan and opened a hosiery company.

The family’s real estate investments have included property in New York and California. One of its most valuable assets today: 42 units in an apartment building in Santa Monica. The first apartment that they bought in the building for $250,000 is now worth $3.2 million, Omar Spahi said.

Omar Spahi said he filed for bankruptcy protection in 2009 after he couldn’t refinance some property. “It was during the recession,” he said. “A lot of people were having trouble.”

Omar Spahi decided to venture back to Manhattan real estate after meeting Nest Seekers International broker
Ryan Serhant,
whom he had seen on the Bravo cable network’s “Million Dollar Listing New York” reality show. At first, the Spahis wanted Mr. Serhant to help market the family’s Santa Monica apartments.

Mr. Serhant, however, advised him to consider buying apartment units at 100 Avenue A. The Spahis and their Manhattan and Santa Monica holdings are slated be featured in a coming episode of “Million Dollar Listing New York.”

“You can’t get condos for prices like this one [at 100 Avenue A] on West 57th Street,” said Mr. Serhant.

Mr. Spahi said he plans to rent out the one-bedroom units for about $5,500 a month and the two-bedroom unit for $7,500. That is high for the neighborhood, where the average one bedroom with a doorman rents for $4,525 a month and a two-bedroom fetches an average of $6,100 a month, according to MNS Capital Real Estate Impact, a residential brokerage.

However, more luxury units are opening in what once was a crime-plagued neighborhood best known for the drug dealers hanging out in Tompkins Square Park. Developer
Doug Steiner
is building a luxury condo at 438 E. 12th St. The Adele, a high-end rental at 310 E. 2nd St., recently made its debut. And a building at 189 Avenue C was converted to an upscale condo from a rental.

“The East Village is becoming gentrified but still has a cool vibe,” said Corlie Ohl, a Citi Habitats broker that has lived in the neighborhood for 12 years. Ms. Ohl adds that while the rents Mr. Spahi is considering may sound high, they are still less than similar buildings in more established residential enclaves.